All of the Spratly Islands claimants have occupied some of the islands, and/or stationed troops and built fortified structures on the reefs. Brunei, which does not claim any of the Spratly Islands, has not occupied any of them, but has declared an Exclusive Economic Zone that includes Louisa Reef.
Military skirmishes have occurred numerous times over the past two decades. The most serious occurred in 1974, when China invaded and captured the Paracel Islands from Vietnam, and in 1988, when the Chinese and Vietnamese navies clashed at Johnson Reef in the Spratly Islands, sinking several Vietnamese boats and killing over 70 sailors.
Indonesia has taken the leading role in diplomatic initiatives and cooperative agreements to resolve South China Sea issues, particularly through the ASEAN (Association of Southeast Asian Nations) forum, which has called for the peaceful arbitration of territorial claims. ASEAN includes all South China Sea nations except for China and Taiwan, and has held a number of working groups with China and Taiwan on related issues that have the potential to foster the cooperation and friendship needed to resolve the more contentious issues in the region. Indonesia hosted the first of these workshops in 1990. These issues have also been discussed at the larger ASEAN Regional Forum (ARF), held in conjunction with the ASEAN Post Ministerial Conference, which draws together 22 countries which are involved in the security of the Asia Pacific region, including all ASEAN members.
ASEAN ministers agreed in 1996 that there should be a regional code of conduct for the South China Sea to permit activities such as scientific research and efforts to combat piracy and drug trafficking without invoking the contentious issue of sovereignty. At the ASEAN Summit in November 1999, ASEAN members put forth a general code of conduct for resolving disputes which had been drafted by the Philippines and Vietnam.
Any such agreements would need to involve non-ASEAN members such as China and Taiwan in order to be comprehensive. China, which is a member of the ARF, has argued in the past that the resolution of territorial disputes should be a bilateral issue. However, other ARF members, such as the United States, have argued that all ARF members had an interest in issues affecting the peace and stability of the region, and that the ARF forum was appropriate for discussing these issues. Views on this issue are varied:
China has begun a dialogue with ASEAN on the idea of a "code of conduct" governing actions by claimants, but progress has been slow. In general, ASEAN members have pushed for specific committments to refrain from additional occupation of reefs or new construction, which China has favored a more vague committment to refrain from actions which would "complicate the situation." In November 2002, China and the 10 members of ASEAN signed a Joint Declaration on the Conduct of the Parties, which pledged to "undertake to resolve their territorial and jurisdictional disputes by peaceful means" without "resorting to the threat or use of force."
Malaysian Foreign Minister Syed Hamid bin Syed Jaafar Albar stated that it was his belief that ASEAN nations had agreed that the territorial disputes were an ASEAN issue, and should not be resolved in other international forums.
Vietnam has held bilateral group mettings with China to resolve disputed boundaries in the Gulf of Tonkin (referred to as the Beibu Wan by China, the Vinh Bac Bo by Vietnam) and the Spratlys, as Well as land boundaries. The Gulf of Tonkin dispute was resolved in an agreement concluded in December 2000. Vietnam has wanted to include the dispute over the Paracel Islands in any "code of conduct," but the idea is not supported by other ASEAN members because the Paracels are disputed only between Vietnam and China.
Malaysia and Brunei have held talks in 2003 on their conflicting EEZ claims, but have not yet reached an agreement. There have been incidents in 2003 in which naval vessels from Malaysia and Brunei have acted (without the actual use of force) to prevent exploration vessels from working in the disputed area.